Profit adjusted for one-time items and inventory changes fell 58 percent to $1.6 billion, exceeding the $1.18 billion average of analysts’ estimates compiled by Bloomberg. Europe’s biggest oil producer, which borrowed to finance its $52 billion acquisition of BG Group PLC in February, signaled it would cut billions more from its capital investment budget to ensure it can keep paying dividends without seeing debt rise further.

Express Newsletters

Get the latest news, sports and food features sent directly to your inbox.

CEO Ben Van Beurden, who staked his reputation to buy BG, is banking on those assets to help Shell ride out oil’s downturn. The Anglo-Dutch company promised “accelerated” savings from the takeover on Wednesday as well as $30 billion in asset sales. It has leaned heavily on refineries and chemical plants to help counter losses from oil and natural-gas production, a strategy that’s benefited BP PLC and Total SA too.

“The key point going forward is expenditure and asset disposals and if those targets can be achieved,” said Brendan Warn, a managing director at BMO Capital Markets in London. “The earnings and production from BG show they bought that company at just the right time.”

Business

BG contributed 796,000 barrels a day to Shell’s quarterly oil and gas output, which rose 16 percent to 3.66 million barrels a day but resulted in a $1.4 billion loss as prices tumbled. Shell earned $2 billion from its downstream operations, including refining, trading and chemicals, beating the analysts’ estimate it provided. Liquefied natural gas sales climbed 25 percent.

Van Beurden has renegotiated contracts, eliminated thousands of jobs and sought to improve efficiency to weather the oil market slump. Yet the acquisition of BG is driving up Shell’s debt gearing, which has risen above 26 percent from 14 percent at the end of last year. Debt concerns resulted in a credit-rating cut by Fitch Ratings in February, potentially increasing Shell’s cost of borrowing.

Delivering efficiency savings from the takeover will be cheaper than originally set out, Van Beurden said in a statement. Capital investment in 2016 is “trending toward” $30 billion from previous guidance of $33 billion, 36 percent lower than the combined investment of Shell and BG in 2014, he said.

The stock has gained 14 percent this year after a 31 percent decline in 2015, making it the best performer among the world’s five biggest nonstate oil companies, which include Exxon Mobil Corp. and Chevron Corp.

Brent crude, the global benchmark, sank to the lowest since 2004 in the first quarter. Van Beurden pressed ahead with the $52 billion purchase of BG even as Brent dropped below $28 a barrel, adding oil and gas assets from Brazil to Kazakhstan and Australia and increasing Shell’s dominance of the LNG market.

Crude has rallied since its low in January, rising above $45 as U.S. production slows and major producers including Saudi Arabia study a possible cap on output.